THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN KING, CNN ANCHOR: Thanks, Wolf, and good evening, everyone.

Driving our debate tonight, a risky bet by the vice president and a provocative conversation we had last night. The bet was the Democrats will keep their Congressional majorities after the midterm elections. Perhaps.

But, in a moment, we'll map out the politics of the economy and show you that as the summer comes to the end, more and more Democrats are nervous.

But first, about last night, evangelist Franklin Graham visited with us to talk about President Obama's faith and Mr. Graham's dim view of Islam. He stirred some controversy. Some of you were mad we had him on in the first place. Others were mad I interrupted a couple of times. One of the nation's best religious scholars is here with us to help us sort through the Islam debate.

Let's begin, though, with Mr. Graham's take on question about the president's faith. One in five Americans think Mr. Obama is Muslim. Another two in five aren't sure what religion he practices.

Why the confusion? Mr. Graham says he knows.

(BEGIN VIDEO CLIP)

REV. FRANKLIN GRAHAM, SAMARITAN'S PURSE: I think that the president's problem is that he was born a Muslim. His father was a Muslim. The seed of Islam is passed through the father, like the seed of Judaism is passed through mother. He was born a Muslim. His father gave him an Islamic name.

Where from (ph) here, let's talk it over with Democratic strategist James Carville; Democracy Now radio and TV host Amy Goodman; "New York Times" national political correspondent Jeff Zeleny. He joins us from St. Louis. And Republican strategists Rich Galen right with me here in Washington. But Jeff, I want to go to you first because you're out there at the Democratic National Committee meeting today where I'm sure this whole religion issue was a subject of conversation. You've also spent quite a bit of time covering the White House.

Franklin Graham last night, when I asked him - I was - he had just recently prayed with the president. I was - I guess I was expecting, you know, we enjoyed prayer with the president of the United States and that's always an honor. Instead, the White House thinks he was trying to take a shot.

JEFF ZELENY, NATIONAL POLITICAN CORRESPONDENT, NEW YORK TIMES: Well, the White House is very sensitive to this now, obviously, John. I mean, the president has purposely not tried to put religion - put it (ph) on his sleeve, if you will, and make this a - a forefront thing. But they are taking these numbers very seriously, and they are coming to the realization that he is going to have to spend more time in the public eye, you know, attending services and things.

But Democrats are worried about this because it's just one more thing that makes President Obama sort of look like he is - is different than people thought. It sort of feeds into a narrative that he's not exactly who people thought he was. From a crass political point of view, it's these independent voters who are top concern here of Democrats, and they think they've been sort of sold a bill of goods.

So, it's a very sensitive matter for the White House, a very sensitive matter for this - you know, for this president, but, you know, get him to church a little bit more is what some Democrats here told me.

KING: That's an interesting take. Now, we want to be fair to the president. Mr. Graham gave his take. The White House of course doesn't like.

Let's go back in time. I want you to listen here. This is Barack Obama at February, 2009, explaining his own sense of when he was born and his religious evolution.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I was not raised in a particularly religious household. I had a father who was born a Muslim but became an atheist, and grand parents who were non- practicing Methodists and Baptists, and a mother who was skeptical of organized religion. I didn't become a Christian until many years later, when I moved to the south side of Chicago after college.

(END VIDEO CLIP)

KING: James Carville, this debate - you heard Jeff Zeleny say he's out at this big meeting with Democrats. Some of them are a bit nervous. Some of them would like the president to maybe go to church more, make a more public demonstration. Is that necessary? JAMES CARVILLE, CNN CONTRIBUTOR: Well, look, you know, you - 20 percent of the people don't believe he was born in the United States. I mean, there's nothing you can do with stupidity. I mean, it's just out there, and I - you know, people, I guess are going believe anything that they - they want to believe.

I have no idea what the seed of Islam is or the seed of Catholicism or somebody else. It's - absolutely no idea what this guy is talking about and these people want a war with 1.2 million Muslims and I think it's the dumbest thing I ever heard. And if Franklin Graham wants to go fight that war, then go pack a rifle and join the Marine Corps and fight - but we're not at war with Islam. Be very clear about that.

KING: If you -

CARVILLE: And I just think this whole thing is - is absurd and ridiculous.

KING: If you talk to people close to the president, both inside the White House and personal friends outside the White House, they say, number one, part of it is because he prefers not to have repeated, frequent public displays of his faith. Therefore the Obamas have not picked a church. We don't see them frequently in religious settings.

But they also say part of it is because what they believe - and now they add Franklin - Franklin Graham to the list - is a deliberate strategy by those people on the right.

I want you to listen to something Rush Limbaugh said earlier this week on his radio show.

(BEGIN AUDIO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: If it was OK and even laudatory to call Bill Clinton America's first black president, why can't we call Imam Obama America's first Muslim president? What's wrong with it? Somebody tell me.

(END AUDIO CLIP)

KING: That is Rush Limbaugh there. And Amy, I want to bring you into the conversation.

But first, our staff did a little bit of research. We wanted to see if Franklin Graham said things like this before. Had he leaned more into politics than his father? Here's something he said in a Canadian interview just last week.

(BEGIN VIDEO CLIP)

GRAHAM: I just don't like the people that - that he has surrounded himself with. The ultra left wing socialists in America are his advisers and his friends, and that bothers me. I think he, himself, is a very nice man, but I think he's got the wrong people around him.

(END VIDEO CLIP)

KING: So, Amy, if - if people are confused, if Americans are confused, Amy Goodman, about their president's faith, whose fault is that?

AMY GOODMAN, HOST, DEMOCRACYNOW.ORG: Well, I think when you have someone like Rush Limbaugh talking about Imam Obama, you know, the problem with that is that it's just not true. I thank, gosh, for our forefathers and foremothers who so deeply believed, fleeing religious persecution themselves to establish this country, deeply believed in the separation of church and state, and the fact that there are people of every religion running in races around this country actually is what makes this country great.

KING: And to Amy's point, Rich, you know, Kirby John Caldwell is a spiritual leader. He was close to President Bush. He - I think he was - was the minister at one of the Bush daughter's weddings. But he also knows this president and he was on "RICK'S LIST" last night, and made the point of this - the president of the United States, what are we doing?

(BEGIN VIDEO CLIP)

REV. KIRBY JOHN CALDWELL, WINDSOR VILLAGE UNITED METHODIST CHURCH: Never in the history of modern day politics has a president said, I'm a Christian, and folks say, oh, no, you're not a Christian. You're a Muslim. As my grandmother used to say, that's downright uncouth.

(END VIDEO CLIP)

KING: Downright uncouth, but is it a reflection of the times we live in?

RICH GALEN, REPUBLICAN STRATEGIST: Well, no I don't think so. Well, it - it is a reflection of the times, but - but religion amongst presidents has been - James and I are the only two old enough to remember this, but in 1960, there was a huge amount of discussion as to whether or not John Kennedy, the first Catholic elected, would have to take his instructions from the Vatican, and people were very serious about that.

In retrospect, of course, it sounds - it sounds really silly, but you can go down through the time - Reagan was first divorced, Lieberman was Jewish, Bush was Born Again, and Romney is - is Mormon. So this is the kind of thing that comes up again and again and again.

What - what I'm unclear about is why A) the Pew Organization decided to take this poll, and, B) why anybody, including us, is spending as much time on it as - as we are. Clearly, the president - I mean, who knows what somebody is? They tell you what they are.

The president has said that he's Christian, I take him at his word. I'm OK with this. KING: But I want you to listen to the official response. I told you about that e-mail I got from a top presidential adviser, essentially taking a whack back at Franklin Graham. The president's on vacation at Martha's Vineyard. Here was the official response from Bill Burton, the Deputy Press Secretary.

(BEGIN VIDEO CLIP)

BILL BURTON, WHITE HOUSE DEPUTY PRESS SECRETARY: The president is a committed Christian. I think that the American people know that. And, you know, Franklin Graham is certainly entitled to his opinion.

(END VIDEO CLIP)

KING: Jeff Zeleny, to parse that, I mean, the American people obviously don't know that. If 60 percent of the American people either don't know what faith he is or think he's a Muslim, they don't know that. And so, into that, whether it's criticism, whether it's unfair, whether it's irrelevant, or whether it's ridiculous, if 60 percent of the American people don't know the answer, this conversation will continue, wouldn't it?

ZELENY: I think it will continue. And this poll was taken before the president made his comments about the mosque, so who knows what it would be now? Probably higher.

You know, but I think the conversation will continue, but, again, it gets at the question, you know, that concerns the White House more than anything, why people are questioning, you know, the very, you know, being of this man, the very core of this president? They thought that they had gotten over that, you know, with their very long campaign in 2007 and 2008, you know, but now, the criticism and the volume is, you know, much, much, much higher than it ever was before.

So they realize that they have some political work, that they have to address this. I mean, they can, you know, say from the podium that he's a committed Christian, but a lot of Democrats that I have spoken to who are, you know, have the president's best interest in mind and they like him deeply, are worried about this, and think that, you know, there are some fairly easy steps that the White Housing, you know, would be able to do to sort of help this problem go away.

GALEN: Look, the -- there's going to be an election on November 2nd. This is another example of for whoever's - whoever's fault it, it doesn't matter. The fact is this is another two or three days when Democrats on the campaign trail are going to have to be talking about something they have no interest in talking about, but it's what their - their constituents are going to hear about.

KING: Well, everybody stand by. Our panel's going to stay with us. When we come back, we're going to talk about other issues maybe the Democrats want to talk about and or maybe they don't. One of those issues is the economy and the vice president's big bet today, and it's part of our discussion.

We'll map out the pain in recent months, what has happened across the country and the economy. Some think that pain translates into Republican gain.

Well, we go one on one tonight. Last night we did have Franklin Graham, and, as we just said, tonight, one of the country's best religious scholars will come here to give us what we'll call an Islam fact check.

And on the radar tonight, Jeb Bush, the former president's brother, the one-time Florida governor. A new twist tonight on the "L" word.

And Rod Blagojevich gave an interview today in which he made a comparison. Let's call him Biblical Blago.

(COMMERCIAL BREAK)

KING: Back with our great panel on a Friday night. Let's shift the discussion to the economy and politics.

Seventy-four days to Election Day, big Democratic meeting. That's where Jeff Zeleny is tonight. We'll get to that in a minute.

But first, I want to show you the sober reality right here. This is unemployment by county all across America. This is going back to 2007. The brighter the county, the lower the unemployment rate. So where you see bright yellow, that's good news. Where you start to see purple and black, that's bad news. Black is 10 percent or over. Purple is seven percent or over. This is 2007.

Watch the last three years of the lives of most Americans as we come across here from 2007 to the present. Again, purple and black is bad news. That's double-digit unemployment. Look at that play our across America. You cannot look at that and, A) not get depressed, and B) think if the party in power gets punished when you see a bad map like that, then it is bad news for the Democrats.

And yet, despite that, and maybe he has to be optimistic, the Vice President Joe Biden went to the Democratic National Committee summer meeting today and he sounded confident.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: On November the 3rd, the day after this coming election, there will be in Washington, D.C. a Democratic majority in the House and a Democratic majority in the Senate. That will be the case. And if it were not illegal, I'd make book on it.

(END VIDEO CLIP)

KING: James Carville, you helped elect Bill Clinton on the theme that it's the economy, stupid. If you - if Joe Biden asked you for a loan to make that bet, how much would you be willing to give him?

CARVILLE: You know, I don't know. I'd have to - yes. Let's give him a little bit more. We're not to Labor Day yet. But just think of what we - he wouldn't be - at this, I mean, it wouldn't be 14 minutes into the show if he just said I'll make book we're going to lose both. I mean, (INAUDIBLE) the top of the show.

I like the vice president, but, I mean, it's - it's kind of predictable that the vice president of a political party would predict his party would hold on to Congress in the November elections. And, you know what? We might. It's not - you know, it's not going to be a good year, but maybe we can do some things between now and November to make it better than it seems right now.

KING: Maybe. One of the fascinating things if you look at the data, if you pick a race across the country or pick a political dynamic across the country and you go back, say, four or six weeks and then you look again now, it is almost impossible to find any trend line that favors the Democrats.

GALEN: (INAUDIBLE).

KING: So let's take a look at some of these big favors - a trend line that's hard to find that favors the Democrats.

GALEN: Oh, sorry.

KING: Let's go look. Cincinnati, great race for governor there. The incumbent, Ted Strickland. If you go back in May, close race, but Ted Strickland ahead, narrowly, over his Republican opponent. The most recent poll, however, that Republican now almost 10 points ahead.

Here's another question, who are you going the vote for when it comes to Congress this fall? Back in April, the Democrats had a lead, 50 percent to 46 percent. Right now, the Republicans had a lead. Again, it's a narrow gap, but the trend lines all at the moment moving the Republicans' way.

Rich Galen, I guess the question to the Republicans is everything right now, the wind is at your back. What do you have to do not to blow it?

GALEN: Well, I - I think what you have to do is not step on yourself. I think if the Republicans begin to formulate a positive message, which they will do as we get into the, as James says, once we get past Labor Day and we get into the final sprint, the Republicans will begin to - to enunciate what they will do when they take control, because, when they do take control, and thank God for vice presidents. They always get sent out to say stuff like that.

But when the Republicans do take control, at least of the House, the - the leash will be very short, I think, on behalf of the American public as to whether or not they're showing progress once they get in - get the control back.

KING: Amy Goodwin, when it comes to energy and motivation, a lot of that dark, the double-digit unemployment county by county, is in places where you need lower income, rural people who maybe, you know, helped the Democrats, should be the Democrats, at least traditionally have been the Democrats' base. Are they going to come out and play this year and vote this year or are they so down in this economy that they don't trust or like any politician?

GOODMAN: Well, you know, I've been thinking a lot about Nevada and in fact if the vice president were to make book there, he wouldn't be arrested, right? He could gamble there.

And it's very interesting. I mean, I was just in Las Vegas for the Net Roots Nation Conference of thousands of bloggers and it is devastating, right? The worst unemployment in the country, and you think Harry Reid would be blamed for that and normally he would have been, but Sharron Angle, who is up against him for his Senate seat, you know, she is for ending unemployment benefits.

So you have a bad situation, the incumbent would generally not - not benefit, but you have someone who is so extreme and will devastate the unemployed in Nevada, so that's where the Democrats come out ahead.

GALEN: Yet he's only ahead by two percentage points.

KING: And - and that is the question, Jeff Zeleny, to the point Rich just made, that you can go in a lot of these races when you look on paper and say, Harry Reid is a better candidate than Sharron Angle. And you can go race by race and find them and yet those races are close and in many of them the Republicans are ahead because of this strategic dynamic, which is a bad economy and grumpy electorate.

You are at the Democratic National Committee meeting, do they believe that tactically, whether it's through resources or using the levers of power that they can somehow counter the bigger strategic wave in the country?

ZELENY: It's their big hope, John. It's really one of the last things that they have. But the Democratic Party is strong in one respect and it is sort of these on the ground campaign organizations, the muscle is as - as big as it's been as, you know, as well exercised as it's been in a long time. And the Republicans, by contrast, really have not had a very successful election since 2004, the re-election of President George W. Bush, and the - the ground organization has atrophied a little bit.

So if you talk to Democrats, it's one thing that they sort of believe that will make things not quite as bad as they probably otherwise would be is some of these, you know, organizations on the ground. But, the Obama organization, "Organizing for America", this is going to be the biggest test of this organization. You know, did they really build something in 2008? Will some of these people who were first-time voters, would they come out again or not?

So it's one thing that gives Democrats some hope, but they know that it's not going to be a good November for them. And the vice president, I agree with James, I mean, he was just speaking to the crowd. He was, you know, giving a pep rally boosting their spirits, say, that was his role. Had he said the opposite, it certainly would have been big news. I didn't take what he said today all that - as all that surprising.

UNIDENTIFIED MALE: Biden lies.

KING: I think it's a small - a small bet, Jeff's on it (ph). And we're going to ask our panel to hang in there with us one more minute. In a moment, we'll continue this conversation.

You've heard us saying all politics are local, the map tells us a lot where the economy is bad is often where some of the best races are. Don't go anywhere.

(COMMERCIAL BREAK)

KING: A moment ago we showed you this bleak look at the economy. These are counties across America, the darker the county, the higher the unemployment rate. That's one way to look at it.

But let's try this instead and look at it this way in terms of how it impacts the election campaign. Look at these states across the country. These are states with double-digit employment or the states that are in gold have either double-digit employment or states where the unemployment rate went up last month.

I'm going to focus for the rest of our conversation here, our panel is still with us. Just out here in the West; in California, 12.3 percent unemployment. Barbara Boxer, this is in a blue state for a long time. You would think she would be safe even in a tough year, this is a very competitive Senate race out in California in part because of the sour economy. That's one.

We were just talking a minute ago about Nevada. The Senate majority leader Harry Reid, Nevada has the highest unemployment rate in the country, 14.3 percent. Harry Reid in a tough race despite a lot of concerns even in the Republican Party about the Tea Party favorite, Sharron Angle, who won that nomination.

And here's one more to keep on your radar - Oregon, 10.6 percent unemployment. The rate is heading up. Ron Wyden, a few months ago, hardly anybody would have put Ron Wyden on the list of races. You better watch this one just in case there's a wave.

Ron Wyden is starting to run some tough ads out in his race, distancing himself from the president of the United States. Why? Bailouts are unpopular. The unemployment rate is on the rise. Democrats now say keep an eye on this race too even though months ago they would have said, don't worry about Oregon.

James Carville, in an environment like this, you've run a lot of campaigns, what do you do in this final 10 weeks - it will be 10 weeks when we start talking about this next week, what do you do when you know you're in a lousy environment?

CARVILLE: You know, what they're doing, what Senator Wyden does and what other people are doing, you see Robin Carnahan doing, I think very effectively in Missouri, by the way, is you bring - you bring up the other - the opponent. And, you know, it's - look it. You're in it, you - no doubt about it. You are in it - you're swimming upstream, you're in a tough environment, but you can pick off some. I think we have a real shot to pick up, to actually have a take away in the Senate seat here in Louisiana. If we do that that makes the math really hard for the Republicans.

But, you know, that there's - there's no question about these - these candidates - these Democratic candidates in a tough environment, we got - but we got some good candidates out there and some smart campaigns.

And as Jeff points out, a good ground gain, we'll see if that pays off in November to - to hold the Senate. We're going to lose seats, but we may - but hopefully, you know, that hope is we wouldn't lose as many as people think.

KING: And Amy Goodwin, we've talked a lot in recent months about the base maybe unhappy that they didn't get a public option in health care, maybe unhappy the president is adding troops to Afghanistan. Can the president come to them in this final 10 weeks and say, look, I know you're made about some things, but this is much more important than that get out.

GOODWIN: Or maybe the president can actually live up to the principles of - of good progressive politics which are ending the war in Afghanistan, which are being concerned about climate change, which is working towards a public option or maybe even universal health care.

KING: Jeff Zeleny, I'm assuming that no one at the White House is thinking about working towards the public option in health care right now. When you're in a meeting like Democrats where you are, do they view him as an asset? Do they view President Obama as an asset or not?

ZELENY: I think they definitely view him as an asset. I mean, but these are the party faithful of the faithful. I mean, they believe that he has really, you know, done everything that he said he would do at least, you know, in broad strokes. He did get health care, troops are coming out of Iraq.

I thought one of the more interesting comments was sort of an admonition today from Senator McCaskill from Missouri. She said, look, Democrats can get in a bunker if they want or we can start talking about our accomplishments a little bit more. She seemed to be that she was - was wanting to sort of get away from the Bush argument and talking about their accomplishments more.

So Democrats still see the president as an asset.

KING: Interesting to watch.

Rich Galen, to Jeff's point earlier or James' finding with Jeff's point that we don't really know the Republicans have a turnout operations. It's been atrophied, thumped (ph) in 2006, pumped (ph) in 2008. Is that a worry?

GALEN: Of course it's a worry. Because in a midterm election you need to get your people out to vote. But what all this other stuff that we've been talking about including what Amy was just talking about. Amy will need to put you on an airplane and go out and say what you just said, but what that does is it suppresses the Democratic vote. Republicans are excited. Democrats are suppressed. I think that the - the turnout operation is sort of self-evident.

KING: And weeks to go, we've got a lot to cover on days ahead. I appreciate everyone coming in on a Friday. Rich, Jeff, Amy and James, thank you.

When we come back, one of the nation's top religious scholars joins me to revisit the controversial comments made right here last night about Islam by the Reverend Franklin Graham.

(COMMERCIAL BREAK)

KING: Last night, we spent some time with the well-known evangelist Reverend Franklin Graham and heard his views on Islam and the president. Mr. Graham stirred some controversy to say the least saying, quote, "The teaching of Islam is to hate the Jew, to hate the Christian, to kill them." Is Franklin Graham's interpretation of the Islam accurate?

Joining us from Boston is Stephen Prothero, he's a religious professor from Boston University, and the author of "God is not One: The Eight Rival Religions that Run the World."

Professor, thanks for your time. I want to get to Reverend Graham's thoughts on Islam in a minute, but I want to start his take on the president. Back in April, President Obama went to pray with Billy Graham and with Franklin Graham, and as you know, there is a new poll out this week that shows nearly 20 percent of Americans think the president is a Muslim and 40 percent of Americans don't know what faith he practices. The president says he is a Christian and I asked Franklin Graham, "You prayed with him, sir, and do you have any doubt about his Christian faith" and this is the answer:

(BEGIN VIDEO CLIP)

GRAHAM: Well, I think that the president's problem is that he was born a Muslim. His father was a Muslim, the seed of Islam is passed through the father like the seed of Judaism is passed through mother. He was born a Muslim; his father gave him an Islamic name.

Now, it's obvious that the president has renounced the prophet Muhammad, and renounced Islam and accepted Jesus Christ. That's what he says has he has done, I cannot say that he hasn't.

(END VIDEO CLIP)

PROF STEPHEN PROTHERO, BOSTON UNIVERSITY: Well, this is part of why Americans are confused about the situation here is because we have people who are supposed to be responsible public leaders like Franklin Graham who are spreading what seems to me like a sort of misinformation campaign.

If you went to a Franklin Graham revival and you heard the altar call and said, come up to accept Jesus in your heart, you wouldn't be asked by the people up at the front of the altar, you know, is your father a Zoroastrian, was your father a Muslim. You would accept Jesus and they would accept you as a Christian. I think that is what Franklin Graham should say. Barack Obama says he is a Christian; he is a Christian, end of story.

KING: This may be more of a political question than a question for a professor of religion, but does it matter to American voter?

PROTHERO: It does. There's a lot of Americans who are unwilling to vote for a Mormon, there's a lot of Americans who are unwilling to vote for a Muslim, there's a lot of Americans who are unwilling to vote for an atheist. And, you know, in the kind of culture that we have stewing around issues like this Islamic community center and mosque near Ground Zero, it is pretty clear there's a lot of people out there who are not only are mistrustful of Islam, but are handful toward Islam.

And you know, this is where I'm reminded of the differences between Franklin Graham and Billy Graham. You know, Billy Graham had a kind of confidence that you could go into a revival and you could preach the gospel of Jesus Christ and you could be confident that people would accept that.

Franklin Graham does not seem to be interested in focusing on preaching the gospel of Jesus; he wants to be spreading misinformation about the religion of Islam.

KING: Well, I know you have closely studied and deeply studied all of the great faiths, so I want to go through some of what Franklin Graham said about Islam and have you give your take on what he said.

(BEGIN VIDEO CLIP)

GRAHAM: The teaching of Islam is to hate the Jew, to hate the Christian, to kill them. Their goal is world domination and for the Muslim peace means when all of the other nations are subject to Islam, then we are at peace.

(END VIDEO CLIP)

KING: Can he give a citation, if you were grading the paper, can he give a citation to support that?

PROTHERO: Well, no. I mean, you know, this is where I frankly find it a combination of amusing and frustrating that we are listening to an evangelical preacher about what Islam is. You know, if you want to learn something about Pepsi, do you go to the CEO of Coke? If you want to learn about Hewlett-Packard, do you go to the CEO of Dell?

I mean, these are rival religions, as I described them in my book, "The Rival Religions that Run the World." And they're competitors. Why are we listening to Franklin Graham? He doesn't know anything about Islam. And, you know, you could talk about, oh, Islam is a religion of hate, Islam is a religion of love. These are, you know, simplistic kind of sound bites and again, he's just trying to spread disinformation about a religion so he can one-up it, so he can get more followers. That is not what we need now in our civic life in America. You know, this is a country that has religious tolerance, that has the first amendment, that has freedom of religion and Americans are functionally illiterate when it comes to religions, not only other than their own, but Christianity itself, and it does not help the conversation we need to have as a public about Islam to be having people who are just basically spreading falsehoods about the tradition.

KING: But, as you know, when debates like this unfold, especially at a time when people do not much trust their politicians they do look to people in their community and many Christians do look to people like Reverend Graham for guidance, which is one of the reasons we wanted to hear the views, but also one of the reasons we wanted to talk to you and we have talked to Muslims this on the program to get their voice into the debate, as well.

I want you to listen to one more, because again, what Reverend Graham says that if you go back in history and if you go back and literally read things in the Koran, his take on that is that he views the belief of -- the beliefs and the practices of Muslims as he interprets them to be to be in some ways I call it a threat to America. Listen.

(BEGIN VIDEO CLIP)

GRAHAM: Remember, true Islam cannot be practiced here in this country. You cannot beat your wife, and cannot do honor killing if your think that your daughter has misbehaved, you cannot kill her. And they are protected by the laws of this country. We are not under the Sharia law, but we are under the Constitution of the United States and so we are protected.

(END VIDEO CLIP)

KING: Again, to the question, can he go back and find something to cite that supports what he says?

PROTHERO: Well, there is the huge disconnect. Yes, you can turn to the Koran and you could find certain passages in the Koran that talk about treating women in ways that a lot of Americans would think are distasteful, but there are a lot of passages in the Koran that talk on the other side.

It's a big book. It's a multivocal book just like the Bible. When Jesus says, "I come not to bring peace but a sword," is it fair to say, oh, Jesus is out to kill people? No, because you read that in the context of the whole Bible. And you read it in the whole context of the Christian tradition, that is how you need to understand passages in the Koran is in the context of the whole Koran and of the context of the whole Islamic tradition.

KING: Let me ask you lastly, professor, this conversation about the proposed site at Ground Zero and about Muslims and about Islam in America, it's been going on for a couple of months and had been intensified in the past couple of weeks. You talked about what you viewed as a religious illiteracy of the American people. Is this conversation helpful or is it hurtful?

PROTHERO: I think the conversation about Islam right now is happening at below a kindergarten level. You know, we have Tea Party folks in Tennessee saying that Islam is a cult. We have Newt Gingrich saying Muslims are like Nazis. We have Franklin Graham saying that Islam is about beating your wife and killing your children. I don't think that elevates the level of conversation.

What we need to think about the Islamic center near Ground Zero or to understand Islam in the world, and America's place in the world in which Islam is important and power, is we need to understand what this tradition about. We need to know something about Sunnis and Shias and Sufis and we are not doing that. We're talking about Islam is a horrible, hateful, evil, ugly religion. I don't think that is a useful conversation. I don't think it is not useful for Americans in that geopolitical context and it certainly isn't useful for American citizens who need to be informed about the world's religions in order to know what to do about them in this country and in the world.

KING: Professor Prothero we want to thank you for time today in helping us understand a bit better. Thanks for coming in.

PROTHERO: Thanks for having me on, John.

KING: Quick break. And when we come back, the other top political news you need to know, tonight. And Jeb Bush, you know him, he's a Republican. When he uses the "L" word to hit Democrats do you think he means liberal? Think again.

(COMMERCIAL BREAK)

KING: Welcome back. Let's check in with Joe Johns for the latest political news you need to know, right now.

Hey, Joe.

JOE JOHNS, CNN NEWS CORRESPONDENT: Hey, John. If you live in Florida and the phone rings, it could be Bill Clinton, the former president who's stumping hard for Democrats lately, recorded a robocall to help Kendrick Meek in next week's primary.

Defense Secretary Robert Gates has ordered changes after a review of the Ft. Hood massacre. The changes include better communication among commanders.

President Obama took a swim in the gulf last week to say that the water was OK, now the first family is on Martha's Vineyard where the folks there are dealing with some beach closures due to fecal contamination.

HILLARY CLINTON, U.S. SECRETARY OF STATE: These negotiations should take place without preconditions and be characterized by good faith and a commitment to their success, which will bring a better future to all of the people of the region.

(END VIDEO CLIP)

JOHNS: Later in day, both sides accepted the invitation to meet in Washington on September 2. And I guess that no preconditions probably means they are not going to settle the Jerusalem question at least not in the next two years -- John.

KING: Well, Joe, that is interesting point. Come on over and join us. They have put a one-year time limit on these negotiations and it will be fascinating to see if they can make the progress. You have to salute President Obama for taking the risk to get involved. You and I have spent a lot of time covering the Clinton and the Bush White Houses and President Clinton invested more time, President Bush tried at the end, this has been an enormous frustration for the United States for a very, very long time.

JOHNS: Just so many moving pieces, you know, there's that, there's the issue of the settlement building resuming at the end of September.

KING: Settlements, borders, fate of Jerusalem, Palestinian right to return and on and on and on, and two leaders who don't like and don't trust each other, but the United States is giving it a crack. We'll keep a eye on that one. Joe's going to stay with us now as we look at some stories on my radar. If you didn't see them while we were talking, Maria Cardona, a Democrat, Robert Traynham from "Roll Call TV," a veteran Republican strategist on Capitol Hill, with us.

Let's start with what we'll call "fact check time" for the president. Remember that building project President Obama touted during his trip to Ohio. He called it a big example of stimulus dollars at work. Well, the city of Columbus finance director was quoted today as saying, "no stimulus dollars were used," federal money, but not stimulus money. Oops.

ROBERT TRAYNHAM, "ROLL CALL WITH ROBERT TRAYNHAM": Oops, and it's also even more interesting that a Democrat, who is the finance director, said that. You know, I don't know if I should be upset or bewildered by the White House. Here's why. Either the White House staff did not do their job and did not brief the president very, very well or the White House is trying to reach very much into their toolbox and try and least some type of success, but the bottom line is, is that it is wrong and they really should not have put the president in that type of situation.

MARIA CARDONA, DEWEY SQUARE GROUP: I do think it was unnecessary, and it is interesting to see whether he adlibbed it or whether it was just somebody who did not take a final look at the speech, because in the background material they gave out beforehand, there is no mention of this is a project from stimulus money, so it's interesting to see. They do need to continue the focus, though, on the fact that this was demonstrative of the White House and Democrats helping small businesses, and again, making a choice against what the Republicans are trying to do in blocking small business legislation here in Washington.

TRAYNHAM: Well, that's not accurate. I mean, we...

CARDONA: It is accurate, absolutely.

TRAYNHAM: Firstly, here's the truth. The truth is that we know that the Republicans are really, really good friends to small business, we know that small business...

CARDONA: Why are they blocking the small business legislation to help small business create jobs?

TRAYNHAM: Well, if you want to go into the details. The details are, it's because the Democrats are not for smaller taxes, they're not for cutting taxes. That is the real unfortunate truth. So, let's be completely fair. Let's be completely transparent...

KING: OK, I'm going to get you both elected to the United States Senate and then you can have this fight on the floor. Sorry to leave you out that one, Joe. Blessed are the peace makers.

JOHNS: No problem.

(LAUGHTER)

KING: Let's move on to this one. Former President George W. Bush getting some support from his younger brother, Jeb. In an interview with the "New York Times" the former Florida governor said the Democratic Parting was showing "desperation" by spending so much time talking about Bush 43 saying, "It's a loser issue. They have a big 'L' on the foreheads, if that's all they've got, it's a pretty good indication of the problems that the Democrats face in 2010."

The "L" word, loser, to the Bush family used to be liberal?

TRAYNHAM: Well, He's got a point there. I mean, look, President Bush has not been in office since January of 2009. The Democrats control this town, they are the individuals that are the levers of power. And you know what, Jeb Bush does have a very valid point here, and the fact is, is that Democrats really should own up to the fact that their policies, unfortunately, are not working right now, and that's very unfortunate for me to say, because I would hope that the policy will be working so that millions of people can get back the work. CARDONA: But if you want to look at the facts...

KING: Oh, poor Joe!

(LAUGHTER)

CARDONA: Go in line. The facts are that the Republican-led congress, and you don't have to actually focus on George Bush. even though he was the head of the party when all of this was happening, but he's not, you know, the president on the ballot, either Obama or Bush, so I think you should focus on the Republican-led Congress. They were the ones who started the fiscally irresponsible policies that got us where we are now.

TRAYNHAM: But the Democrats are on the ballot and they're the ones who are running against the Obama agenda.

CARDONA: And they're focused on the Republican.

TRAYNHAM: That's the bottom line.

CARDONA: They're focused on Republicans.

JOHNS: The fact of the matter is that as far back as 2006 even the Republicans were complaining about the spending policies of George W. Bush, so in some ways both the Republicans and the Democrats agree on this issue.

KING: (INAUDIBLE) this is it. This is it, this is it. The disgraced former Illinois governor, Rod Blagojevich, vows he's, "determined to seek vindication" in the second trial after a jury deadlocked in all but one count against him in that first trial. This morning on the NBC's "Today Show," Blagojevich compared his situation, sit down, compared his situation to the biblical story of David and Goliath.

(BEGIN VIDEO CLIP)

ROD BLAGOJEVICH, FMR ILLINOIS GOVERNOR: You keep fighting against all of the odds. I mean, the fact of the matter is, you know, I'm up against the giant Goliath and I take solace in the biblical story of David, and in this case, I don't have a slingshot, but I do have the truth on my side.

(END VIDEO CLIP)

KING: And in an interview with ABC, tonight, he also compared himself to Winston Churchill in saying, "When I'm vindicated, I certainly don't right myself off. If Winston Churchill can come back, maybe (ph), Blago."

TRAYNHAM: I tell you, I think this is the gift that keeps on giving for the Republicans because the more he talks, the more he brings up these just strange and erratic stories and it just highlights the fact that the Democrats really are in trouble from an ethics perspective, not only with him, but also with Charlie Rangel and Maxine Waters, as well.

CARDONA: I don't think that the majority of the people really see him as being aligned with Democrats, because even the Democrats can say how delusional he is, and frankly on the issue of David. You know, David was actually a likable character. And I don't think that in biblical times if there had been reality TV he wouldn't have run to be on one.

JOHNS: It is impossible to be sympathetic. It really is. It really is. And probably Democrats and Republicans, but talking to a lot of people in Chicago, they are sick of it. They wish it would go away. And they think it's gone on too long. So, the question is, what's the benefit? Who's benefiting by going through this again?

KING: It is a trap door for Blago, don't count on it.

All right, here we go, sex sells and turns out it also donates. According to the Federal Election Commission records, Kentucky Senate candidate, Rand Paul received $4,800 in campaign donations from the owners of an adult Web site. No word on if he plans to return the money. We reached out repeatedly, repeatedly to the Rand Paul's office, today, and didn't hear back. Now, you can't blame the candidate, people can give money without the candidate knowing, but how a candidate handles something like this matters.

CARDONA: Well, you can blame the candidate, especially when the candidate is part of a party that has prided themselves on being, "carrying the banner of family values." I think that is hypocrisy at its biggest and he needs to either give back the money or man-up and, you know, besides (ph) the donation.

JOHNS: You know, people need to look at this a little closer. This isn't exactly a porn site, No. 1, but I think...

KING: How do you know?

CARDONA: Say what? You looked?

JOHNS: I read some of the articles. I didn't sign up. Well, not a porn site, it's a social networking site where apparently people don't wear very many clothes. But -- hold on. The problem is that it is Kentucky and in Kentucky the Bible Belt people just don't appreciate that kind of thing, and it's not going to get you votes, so he's going to have a little trouble.

TRAYNHAM: I have no comment. I accept that. I assume that this is a small business owner expressing their right to give money to a candidate, end of story.

KING: Nice try.

(LAUGHTER)

Joe, thanks very much. We will see Joe on Monday. Maria and Robert are staying right here. Up next, a high caliber candidate, well, she changes her tune. And still to come tonight, you get your chance to play the anchorman, ask me some questions.

(COMMERCIAL BREAK)

ANNOUNCER: Here comes the "Play-by-Play."

KING: Some political ads to break down in the Friday "Play-by- Play." Still with us, Republican, Robert Traynham, Democrat, Maria Cardona.

Back a few months ago we introduced you to Pamela Gornam. She's running for Congress, she's in a crowded Republican primary out in Arizona. Her first ad, well, it caught our eye. We call this the high caliber candidate.

KING: Yeah. Anyone in the room want to mess with Pamela Gorman? Well, that was then. That was then. Talk about a change in tune.

(BEGIN VIDEO CLIP)

(BEGIN GRAPHIC)

Remember when we were proud of our leaders?

When we stood for fiscal responsibility and honesty?

It can be that way again.

(END VIDEO CLIP)

KING: Pamela Gorman trying to link herself with Barry Goldwater, Ronald Reagan, she even sent out a tweet right before that ad went on television saying, hey, watch my new ad, it's a lot different than the last one.

CARDONA: I think she's trying to find out what actually works. She clearly doesn't have a theme and a message that has resonated with voters or else I think that you would see her at this point in the election trying to stick to one theme and one message. She hasn't found it. TRAYNHAM: I think those two themes actually marry each other. Fist and foremost, she's clearing saying that she's a firm supporter of Second Amendment rights which plays extremely big in the western part of the country. But speaking of the western part of the country, she had Barry Goldwater and obviously Ronald Reagan, two, arguably one of the most arguably the most popular folks in the Republican Party. So those two themes actually marry each other very, very well.

KING: Let's stay out in the West, because it's one of the reasons we got a number of fascinating elections. And one of the things we watch, and we watch a lot of ads every day here, on JOHN KING USA, because they tell you a lot about how close is the race, what's the tone of the race. In Colorado, running for governor, the Democratic candidate, is the Denver mayor, John Hickenlooper. Republicans nominated a candidate last week that the Republican Party is asking, begging to drop out of the race because they don't think he can win. So, Hickenlooper, ahead the moment. When you're ahead, you can be different.

MAYOR JOHN HICKENLOOPER (D), DENVER: I'm John Hickenlooper and I guess I'm not a very good politician because I can't stand negative ads. Every time I see one I feel like I need to take a shower. And you see a lot of it. With all the challenges we face, Colorado needs a governor to bring us together, to create jobs and cut government spending, that's why I won't run negative ads. Pitting one group against the other or one part of Colorado against another doesn't help anyone. And besides, we need the water.

(END VIDEO CLIP)

KING: That's pretty good. It's funny, it gets your attention, helps you build good will. Mayor Hickenlooper has a lot of shirts and they're all wet.

(LAUGHTER)

TRAYNHAM: I think it's great. First of all, we're talking about it which is a good thing. People will remember it. But also, too, remember most people in this country receive about 30 ads or so a day, so if in fact you can break to the clutter and actually make an ad that's creative, that's memorable, but also sends a message is a good thing. I think it's fabulous.

CARDONA: Yeah, I love this ad and I think it will absolutely make him stand out. Not only because of the ad itself, but I think in this negativity where we all are, and you know, Washington has such negative ratings, a lot of it is because of all the negative ads that are out there. It will make him stand out. And he's running against somebody who not even the Republican Party wants. So, he can do it.

KING: And if they like him a lot, in the end, if it gets tight, they remember they like him.

CARDONA: Absolutely.

KING: Maria, Robert, thanks for coming in and spending some time with us.

Up next, "Pete on the Street" turns the table on me.

(COMMERCIAL BREAK)

KING: Our offbeat reporter, Pete Dominick, had a lot of fun last week, when he had his friends on the street try to stump the dummy. So, Pete wanted to try it again on a Friday night.

Pete, what do you got for me?

PETE DOMINICK, CNN NEWS CORRESPONDENT: Hey, John King. You have been asking questions the whole hour, I think it's time now that we get some answers from you. I went out and wrangled up some questions. Here we go.

Hey John, I found Otis, he's a New Yorker. Right, Otis?

UNIDENTIFIED MALE: I'm actually from Georgia.

DOMINICK: You're from Georgia?

UNIDENTIFIED MALE: Yeah.

DOMINICK: Which explains the sunglasses. All right Otis, what's your question for John King?

UNIDENTIFIED MALE: John King, I want to know, the whole troop thing is confusing. Some are coming home, but when are all of them coming home?

KING: If the question is Iraq, all of them are due to be home by the end of next year, Otis, December 2011. If the question is Afghanistan, they're going to start coming home, if the president gets his way, next spring. When will they all be home from Afghanistan, the president hasn't answered that question, yet. And of course, it's a big controversy here in Washington.

You got one more, Pete?

UNIDENTIFIED MALE: Hey John, It's Preston from Texas. Is it hard to be a Red Sox fan?

DOMINICK: Yeah, John, is it tough?

KING: It's tough at the moment because of the 6-1/2 back, but we're going to hold in there.

That's all for us, tonight. You have a great night. Pete, all of you out on the street, everybody watching. Max Kellerman takes it away, right now.